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State Name: New Jersey
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State Name lower: new jersey
State Abbreviation: NJ
State Abbreviation Lower: nj

If you've been following the MBS Commentary, you know what a big deal this afternoon could be. Markets have been preparing for it for weeks and MBS Live members have been on top of those movements every step of the way.

This afternoon, when markets are convulsing mere milliseconds after the Fed Announcement, MBS Live members will know what's going on before anyone else. The accuracy and speed of our real-time price stream and alerts is unmatched.

It's happened before and it will happen again in all likelihood, it will happen again. ECB meetings tend to fall on the first Thursday of the month, meaning that the post-announcement press conference is getting underway right at the same time Jobless Claims hits and exactly 24 hours before the most important piece of domestic economic data each month. In an era where markets are balancing the considerations of waning European tail risk vs a potentially stabilized, grinding improvement in the domestic economy all against the backdrop of a rising rate environment, relatively large moves are to be expected. Draghi didn't drop any bombs, but wasn't at all "interest rate friendly" (i.e. no hint of stimulus, generally more upbeat than previous press conferences). Combined with Jobless Claims beating estimates, it causes some legitimate fear about being on the wrong side of the trade tomorrow. Incidentally, that fear was already playing out as bond markets stepped into the week at their best levels in over a month and quickly asked themselves "what are we thinking?!?" The last 4 days has been a sober sort of mad-dash back toward more nimble levels with respect to shorter-term uptrend (whereas Monday was the byproduct of returning to a nimble position in the longer term uptrend to guard against the possibility that the Italian election drama would cause more damage). In the event of a negative reaction tomorrow, the most important defensive wall for bond markets is near 2.05% in terms of 10yr yields. Any sustained break above that is a firm confirmation of the longer term uptrend.

MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.

Below is a recap of instant Reprice Alerts and updates issued via email and text alert to MBS Live subscribers this afternoon.

3:34PM :
Several Negative Reprices Reported. Still holding Support

Fannie 3.0s are still hanging on to their lows from the morning hours that prompted the original reprice alert--12 ticks weaker vs yesterday at 102-26. Into the 1pm hour, MBS looked almost willing to start heading the other direction, but never made it off the ground. Since then, they've stayed locked in a 102-26 to 102-29 range while Treasuries grind microscopically higher in yield (all PM movement in 1.5bp range).

Despite holding ground in terms of MBS, 2 lenders have repriced for the worse in the past 20 minutes, suggesting the possibility that others who forewent a reprice this morning might still be lurking (or just hedging a bit more ahead of tomorrow's NFP and Fannie/Freddie 30yr Fixed Roll in MBS).

Oliver S. Orlicki : "right now everything from a data point in the us has been at or above consensus. Until that data disappoints, it does not matter what is going on in europe IMO. Individual investors are beginning to pour money into the market hoping to ride this rally"

Matt Hodges : "heard a report this morning - companies are doing quite well selling to emerging markets, using fewer workers due to automation and efficiencies... maybe we'll never get back to 400,000+ jobs created per month"

Victor Burek : "the next ecb meeting, looks like new elections in Italy, but that coudl be months away, i think europe is gonna be more about tape bombs, unexpected things that happen"

Brandon Blue : "seems like Italy gave us a nice little dip in an otherwise increasing market for the foreseeable future, no?"

Matt Hodges : "whoa, Victor - bold"

Oliver S. Orlicki : "I think it will get worse tomorrow. NFP is going to be above 200K"

Victor Burek : "if nfp tomorrow is better, we will probably have more red, worse, we will probably see some green"

Matthew Graham : "haven't stocks been "due for a correction" since August?"

Gus Floropoulos : "20 bps range within the 10 yr. in the higher end of the range. As long as e don't break through 2.05 we're in good shape. Add stock mkt due for correction and possible headline risks brewing"

About the Author

A former originator, Matthew began writing for Mortgage News Daily in 2007, covering a wide range of topics. Seeing a need in the marketplace, his focus increasingly shifted toward relating MBS and broader financial markets for loan originators.
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